As soon as the Bitcoin price rallied 10% reaching $57,000, MicroStrategy made a similar move on Wall Street on Tuesday, February 27. The MicroStrategy (NASDAQ: MSTR) share price surged by 9.46% on Tuesday, ending the trading session at $871.
MicroStrategy (MSTR) Leads Bitcoin
Since the beginning of 2024, Microstrategy and Bitcoin have delivered very similar returns with both gaining 28% so far in 2024. However, over the last year, MSTR has considerably outperformed Bitcoin. While Bitcoin is up by 141% on the yearly chart, the MSTR stock has gained 242% at the same time.
One of the biggest reasons behind this MSTR stock rally is the company’s massive Bitcoin holdings on its balance sheet. The company’s executive chairman Michael Saylor said that they would never stop more Bitcoin in the future. Besides, the company’s stock price remains closely associated with the Bitcoin price movements. Furthermore, the company’s total Bitcoin holdings value now crosses $10 billion, of which $4.4 billion is just profits.
Earlier on Monday, MicroStrategy bought an additional 3,000 Bitcoins into its reserves worth a staggering $155 million. The BTC price has already given up 10% since then. Amid the massive run-up in the MSTR stock, the company’s market cap has already reached to $15 billion.
Analysts are expecting that the Microstrategy (MSTR) stock could soon make its way into the S&P 500 index. If so, this could result in a massive influx of liquidity for MSTR.
MSTR Share Price Can Rally to $990
Investment banking firm Benchmark initiated coverage of MicroStrategy by releasing a research report on Tuesday, endorsing a buy rating alongside a share price target of $990. This means an additional 15% gain from the current levels.
Their forecast hinges on the anticipated valuation of the company’s Bitcoin holdings by the end of 2025, as well as the estimated value of its business intelligence software activities at the same time. Benchmark’s price projection takes into account the potential approval of multiple spot Bitcoin ETFs and the forthcoming halving, which could provide further support to the Bitcoin price. Benchmark Senior Equity Research Analyst Mark Palmer said:
“Our price target for MicroStrategy is based on our assumption that the price of bitcoin will reach $125,000 at the end of 2025, and that move would be driven by increased demand resulting from the SEC’s approval in January of spot bitcoin ETFs in the U.S., and the impact of the fourth bitcoin halving, set to occur in late April”.
Palmer emphasized that the decreased rate of supply stemming from the halving has the capacity to significantly propel the cryptocurrency’s price upwards over the next few years.
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